Posted
by
msmash
on Thursday November 02, 2017 @09:00AM
from the new-milestone dept.

A reader shares a report: Bitcoin hit another all-time high Thursday morning, surpassing $7,000 for the first time. The cryptocurrency has had a bullish streak throughout the week following the CME's announcement that it will introduce bitcoin futures contracts. According to data from CoinDesk, the virtual currency reached an all-time high of $7,242.69 at about 7:08 a.m. ET. The jump in price saw the virtual coin rise by more than 7 percent on the day. A surge in the digital coin's value saw the total market value of all cryptocurrencies top $189 billion for the first time Thursday. The market cap of bitcoin alone is currently more than $121 billion, according to data from industry website Coinmarketcap.

Just the other day, actually. The Mexican grocer near me has a jewelers and in-store McDonald's. You can no joke get a voucher from the jeweler for the gold you bring in and spend it in-store at the McDonald's or on groceries.

That heatmap is deceptively bright considering how sparse it is when you actually zoom in to even a large city. Basically if you are in a big city you might be able to drive 20-30 minutes to buy a coffee, have your carpet cleaned, or some other novelty. Even if I could buy every-day staples nearby with it it's far too volatile to hold on to for any duration of time for anything other than speculation.

If you'd read some law in countries other than your own, say China, you'd see that this kind of financial activity (which has been what's driving Bitcoin's prices up for a good while, wealthy Chinese moving/hiding their money out of the country in HUGE quantities) is actually illegal.

But hey, you keep your narrow education and world viewpoint. Those of us with broader global mindsets and experience and education wil

PROTIP 1: Your delusions of worth mean nothing to me. Bitcoins pose no value whatsoever, because there is no work behind them. The are only considered “worth” something, because there are morons, so stupid, that they will pay $7000 to get one. Any why do they do this? Because they heard there are morons, so stupid, that they will pay $7000 to get one. You realize the fallacy of this, right? The circular logic. Like building the 7000th floor of a skyscraper, not on 6999 floors below, but onto it

Most folks don't want to mine their own bitcoins. The Facebook-Intertubes news has educated them to know that they only need to speculate with bitcoin to become as rich as the next President of the United States of America, Mark Zuckerberg. He earned so much money with bitcoins . . . that he can pay all Russians to vote for him in the next election!

There are a bunch of people mining bitcoin to stay alive in Venezuela. They use subsidized electricity costs, spread their operations between a bunch of individual homes to keep from being caught and then trade their Coin for stuff they cannot buy using Bolivars, anywhere.

Oh the joys of socialism, where the leader is recommending the trapping and eating of rabbits to keep from starving, in a country with rich Oil reserves.

I agree. The price seems to be going up because people are speculating that it will continue to go up and more, causing the price to further rise. Few people are buying it as a tool for exchanging goods and services. As a result, there's not much backing the current value other than rarity, which probably isn't enough. It will drop drastically in value eventually once the speculating stops.

Rhodium once experienced a bubble like this. It corrected all the way down.I do believe in bitcoin as an asset. But the current price explosion looks unsustainable and backed by nothing other than fear of missing out.

Gold is valuable beyond being rare. Not only is it pretty to look at (blockchains not so much), but it is used in a lot of electronics and industrial applications where its amazing corrosion resistant properties have no equal.

Gemstones like diamonds similarly have both fashion and industrial applications.

As for secure, it is only as secure as your wallet and many exchanges have been hacked or turned out to be outright frauds. I'd rather a thief have to physically enter my house to rob me, or to store my m

Industrial use of gold only uses up 10% of the amount that's mined. The other 90% has been stockpiled for many years, so we have a huge surplus. Yet, the price is still very high.

There are many cheap materials that are just as pretty to look at, including gold plated jewelry, but people still prefer the solid kind. Not because it's pretty, but because it's valuable. The idea that you can always sell your gold ring in times of need is very powerful.

I also think this is a pure speculation-based bubble, especially because there is so much vested interest in keeping the price high (all those computing farms are a significant hardware investment)

Does anyone know if someone has tried to analyze the bitcoin blockchain in order to calculate a rough estimate how much bitcoin are actually used for non-purely speculative transactions?
Would this be possible?

It costs the same to send 25 lbs of gold as 25 lbs of bricks, so long as you don't care about security

Who sends 25 lbs of gold without caring about security ?

And US currency has the added advantage that it can actually be used to buy things

I agree. Fiat money is an excellent way to buy things, but a rather poor way to save your wealth. I don't think Bitcoin will ever replace regular money, but it can provide a very useful parallel system with some unique and useful properties.

It's a secure store of value that can be easily transferred across the globe. You can put some of your wealth in a bitcoin wallet, memorize 12 words, walk across the border empty handed, buy a laptop, download some software, enter the 12 words, and restore your bitcoin wallet with all the coins intact.

So you freely admit that the only use is a money laundering scheme. Even your scheme isn't very good, since you still depend on local currency to pull it off. How do you buy that laptop? How do you buy pay for the internet connection?

One of the signs of a bubble is that you start getting people who think that the "rules are different now" and that the "old fundamentals don't matter anymore".

Look at the sentiment around.com stocks around 1998, and speculative real estate around 2006. People were convinced that they couldn't lose and that the value of their grossly inflated assets could only go up... until they didn't. Then the panic selling began, and the rest is history.

People said it was in a bubble when bitcoin was $1000 and then they said it again when it was $2000. They said it would be foolish to buy bitcoin for $1000 or $2000

I don't know about you but id kill to buy bitcoins for $1000 or even $2000 now...

How do you know $7000 is anywhere near the top?

If I owned Bitcoin I'd set mine to auto-sell once it hits $9,750. Psychologically, when it hits $10k, some people are going to panic and it will hit a correction. How high bitcoin can go is anyone's guess, but just like $1,000 was a big psychological barrier and we had a correction after hitting it, $10,000 is going to be an even bigger deal. Once the correction hits the basement, might be worth buying again, to see how high it will go next time.

Well me personally I am not interested in trading constantly like that.

I bought some back when they were $100 each and my plan was to hold onto them for like 30 years and just see what they end up like. They could end up worth nothing which in that case I didn't lose much at all. Or they could be worth a ton, like 50,000 per coin or something, especially once all the coins are mined and there is no supply of new coins.

I personally would set a "price goal" to run along with your time goal. Whichever comes first type strategy. That way if it sky rockets to an amount of value you feel meets your value goal quickly, you don't risk it dropping and never returning to that price point.

Yeah, that's a question. I remember when bitcoin was around the $1000 range, and people were saying it was too high. But if I'd bought then, I'd have 7X that. If 7K is the high, I'd be a nidiot to buy at that price. But if it goes to 15K, I'd be kicking myself for not buying.

And since at this point the Bitcoin's valuation seems to be driven entirely by investors' bandwagon psychology, which I don't claim to understand, that makes Bitcoins way to risky for me to invest in, even if I could potentially make a lot of money by timing the market -- I could equally well lose a lot of money, and I have no way to predict which outcome I would get.

1. It is very very liquid. Which outside of accounting means you can buy or sell and convert to cash INSTANTLY!2. Not regulated by the government3. Anybody with a computer and buy or sell without a middle man4. You can do transactions tax free!5. It is cheaper and easier to transfer to different country currencies6. We have a hot bull market with stocks right now. In a bull market where do you think Wall Street will put there money in?

Bitcoin == San Francisco real estate prices. If you bought in 1970 you are rich as low prices WILL NEVER return. Yes fluctuations will happen. But all the 6 things stated above will make it a reality unlike gold. I just wish I got in earlier.

That's a pretty good analogy, perhaps even better than you realized.

Bitcoin is like San Francisco real estate prices, in a scenario where many investors have not yet realized that there are other viable cities out there to invest in besides San Francisco.

Currently a lot of people are pouring money into Bitcoin because it's the one virtual-currency "brand name" they are most familiar with, but what happens once it becomes widespread knowledge that other virtual currencies (Ethereum, Monero, etc etc etc) are

If you look at the history of price in BTC/USD, the bitcoins are (relatively...) stable until end 2016/start 2017, then it went completely volatile with rising in spike, and having dropds which were higher than the full price it was end of 2016 (e.g. drop higher than 1000$). Yet the number of Tx per month did not rise in parallel to values. So what you have here is an extremly volatile speculative commodity and that's it. Anybody would be insane to use it as a currency.

I think we've actually got two quite distinct groups of BTC users at this point (with some members of both groups); those that are using it as a currency, split between those who maintain a float of BTC in a wallet and those that just buy BTC on demand for a specific purchase, and those that are using it as a high-risk speculative investment. Depending on the size of the wallet and the timing of the (probably inevitable) price correction, the former group shouldn't be two badly burnt by it, especially if t

The fee are ALSO utterly volatile making it impracticable for small amount as the GP said. A week ago or so it was 8+$. Now it is in average 5+$. Again volatility at work, and making it utterly improper as currency use.

Gold has value, but the value doesn't wildly fluctuate from month-to-month. The problem with Bitcoin isn't the value itself, its the change in value that's inexplicable. BitCoin, as transfer mechanism, would have the same utility regardless of the price on an individual BitCoin.

Those coins haven't moved since their own creation. Satoshi may have them, may have lost them, may have destroyed them or may even be dead. Who knows. For the best of Bitcoin, those coins should not resurface... or at least not all at once!

BTC is going to $10k and it's that simple. Then it will crash to $1 where you can buy it back and ride it to $100k and repeat.

I agree it will hit $10k and then drop- but it won't go all the way back down to $1. Maybe $7k or $8k and then start rebounding again. BTC is too widely used in illegal transactions to completely collapse. It's more like gold than tulip bulbs. As in, it is both a currency with a certain worth, AND an investment medium rather than just a pure useless investment medium.

If citizen Joe panics and starts to sell, warlord Bob won't because it's not about investment to him.

The segwit2x fork is in a couple of weeks, and so everyone's trying to buy it up to get the free coins. The price will come back down afterwards, and I imagine most people that are trying to run this get-rich-quick scheme are going to lose out as the new coin won't be worth what they lose on selling the BTC they bought to get it for free.

Bitcoin is supposed to be money and the basis of a payment system.......but people measure it in the fiat currency they want it to replace and the frenzy over its price and exchange means it can never be the basis of a stable payments system. Weird.

Gold and Euros also tend to be measured in terms of fiat currency. It's a pretty common way of talking about value.

And the price will stabilize, eventually. If Bitcoin is successful, and becomes an easy means of electronic exchange of value, as well as a store of value, that price will be ridiculously high, compared to the current value. If it's not successful, that price will be near zero.

Is the current price a bubble based on FOMO? Possible. Bitcoin has had 4 or 5 bubble events, but the post-bubble p

"An index from cryptocurrency analyst Alex de Vries, aka Digiconomist, estimates that with prices the way they are now, it would be profitable for Bitcoin miners to burn through over 24 terawatt-hours of electricity annually as they compete to solve increasingly difficult cryptographic puzzles to "mine" more Bitcoins. That's about as much as Nigeria, a country of 186 million people, uses in a year.

This averages out to a shocking 215 kilowatt-hours (KWh) of juice used by miners for each Bitcoin transaction (there are currently about 300,000 transactions per day). Since the average American household consumes 901 KWh per month, each Bitcoin transfer represents enough energy to run a comfortable house, and everything in it, for nearly a week. On a larger scale, De Vries' index shows that bitcoin miners worldwide could be using enough electricity to at any given time to power about 2.26 million American homes."

Given the numbers above, the average transaction cost is about $22 at $0.10/kWh. And it's only increasing with time. With costs like that, Bitcoin no longer makes sense for normal, everyday purchases. Why does Bitcoin have this amazing staying power? Why can't another cryptocurrency with cheaper transactions supplant it?

A blockchain only has value if it's immutable. Proof of work, the thing that consumes all that energy, is how the Bitcoin blockchain is made immutable.

Many have tried, and none have succeeded, in a better method with the same security. A blockchain isn't immutable (solving the byzantine generals' problem) just because it is - but because of the computing power thrown at securing it.

Obviously no one around here cares about the reason bitcoin broke records and the massive developments changing its core software. Bitcoin is going to have its first major hardfork in a long time and become something much better.

Bitcoin Segwit2x is a proposed change which is intended to improve the speed and cost of Bitcoin transactions. The Segwit opens up new possibilities like the Lightning Network, Tumblebit, Schnorr Signatures, Confidential Transactions, Cross-chain atomic swaps, and so on.